Larsen's Specialty Fabrication & Machining group produces many types of finished weldments and assemblies, including this component for an industrial hydraulic liftPhoto courtesy of Larsen Manufacturing

The ISO- and TS-certified company uses a variety of digital inspection tools and quality control procedures to achieve an extremely low defect rate

During the past decade, contract manufacturing in North America has taken an intense turn toward higher quality for the region's OEMs. Not only are specific production and business practices in place outlining how quality should be addressed, but there are a multitude of quality assurance procedures that prescribe what needs to occur every time a part or component is generated. Quality is analyzed and validated in myriad ways to assure the conformity of products on a repeatable basis.

Larsen Manufacturing (www.larsenmfg.com)—a contract manufacturer whose core competencies are sheet metal fabrication and metal stamping—has for many years offered a high level of quality for all of the parts and components that the company produces. Larsen prides itself on the extensive and intensive quality assurance program that it offers its large portfolio of markets served. While Larsen has maintained its certification to ISO 9001 for many years, the company has recently added registration to ISO/TS 16949, the more stringent standard for suppliers to the automotive industry.

Larsen operates two plants in the United States: its corporate headquarters in Mundelein, Illinois, a Chicago suburb; and a facility in El Paso, Texas. The company also has a bilateral manufacturing agreement with an engineering and production plant in Asia.

Larsen Manufacturing's business managers, engineers, inspectors, and machine operators are all on the same page when quality is concerned, so as to maintain a high level of quality for its customers. "First of all, we have a very effective quality management system (QMS), which is compliant with ISO/TS 16949 and ISO 9001," said Don Winter, Larsen's quality director. "We have to maintain a high level of quality that will satisfy an OEM's needs. We performed in the low 20s PPM (parts per million—a defect or event rating to measure quality performance) for a large tier-one automotive supplier last year. We have highly effective new-product and advanced quality planning processes. We do a comprehensive job of reviewing the types of parts we're going to manufacture at the earliest stages of the product realization process. We carefully review customer requirements and volumes and compare what a customer needs in terms of our existing capabilities. We can adjust or augment our systems and resources so as to achieve the right balance of high quality and precision efficiency across the entire value chain."

"We have multiple business units—for example, for metal stamping, in each plant," said David Larsen, the company's co-owner and co-president. "We also have fabrication, specialty fabrication, printed circuit board depaneling equipment, and for our Asia subsidiary. Each of these business units has a business unit director, and these business unit directors are experts in their fields, so they are well versed with all of the quality requirements, and they are tuned in to the quality expectations of an OEM's engineers."

Larsen's quality certifications—ISO and TS—have given the company a more robust, detailed quality management system that has afforded it greater levels of quality and more comprehensive business practices. "Both certifications drive us, beginning in our executive reviews, down through the company into our business units, sort of a business systems analysis," said Winter.

Consumer electronics is Larsen's number one market segment; automotive is its second largest segment; and the appliance industry, its third. The company can easily be considered a one-stop shop, with core competencies in sheet metal fabrication and metal stamping. In addition, Larsen offers prototyping, welding, mechanical assembly, and machining, as well as many secondary and finishing processes. Larsen also provides in-house tooling design and builds, even manufacturing high-tech parts for the government research sector.

"We benefit from the location of the world-renowned Fermi National Accelerator Lab, in Batavia, near Chicago, which is a Department of Energy research facility that specializes in high-energy particle physics," said Jim Miles, Larsen's strategic account sales manager. "The parts that we do for them are highly customized. Being a research facility, there is no standard product for them. They come to us with their different energy research projects, requiring custom-designed metal components to build their own test and data collecting equipment, so the range of variety that they challenge us with is endless. These are very high-tech, high-quality parts. When you consider that automotive is the single largest market in the United States, we like the balance of it not being the largest market we serve, but, of course, we continue to participate in the automotive market because it sets so many new standards and trends for the other industries. Also, we have demonstrated our ability to compete in high-volume consumer electronics, which is the most cost sensitive market that we serve. As a company, we cater to a large variety of markets, and through each engagement, we take the lessons learned to better define Larsen's capabilities."

Larsen has designated engineers on staff who work closely with customers on new product introduction (NPI), R&D, and design for manufacturability (DFM). The company engages early on in the design process, or what company officials call the early supplier involvement (ESI) stage. This is to ensure that the OEM's engineers are consulting with Larsen's engineers during the early stages of design and getting their advice from a manufacturability perspective. "What early supplier involvement means is engaging with a customer at the point of design concept," Miles points out. "This is before anything is finalized on their design, spending time going through a design, and understanding a customer's application. This is about providing advice and information about cost reduction and quality standards that they may not have considered."

Cost Reductions, High Quality for Printer OEM

In one instance, Larsen had a customer who pursued the company with a brand new design concept for a printer. The OEM was competing not just with the rest of market, but with European counterparts within their own organization. In their effort to keep manufacturing in the U.S., the pressure was on to provide the best possible product and the highest level of quality, delivered at the lowest possible cost. "They approached our company to tell us what was at stake and what was riding on it," Miles recalled. "We were able to participate with them by breaking down their design to the basic elements, and we provided input on methods to use a thinner material, but strengthen it by utilizing different forms and gusseting techniques. We significantly eliminated hardware, which excluded purchased items, and automated the process, which provided a higher level of quality. With a full variety of input from our side, they decided to incorporate close to 75 percent of our feedback overall."

In the end, Larsen was able to help the customer develop the best possible solution at a competitive price, making the parts successful. The satisfied customer was able to give Larsen an evaluation after the fact, and told company officials that they were convinced the ownership of the organization would award them this production job. "They said we were able to impact the metal component costs alone in excess of 25 percent, while still providing a robust, high level of quality," Miles said. "They are still producing those printers today, and we are still supplying all of the metal components four-plus years later. We build the chassis, the covers, internal components, and anything that is metal. What we find is that customers who take advantage of our ESI and DFM consulting services are far less likely to come back with significant design changes or revisions down the road."

Miles explains that Larsen continues to invest in value-added engineering capabilities to give its customers the most sophisticated level of quality and cost effectiveness possible. In fact, the company has qualified sales engineers working directly at the customer concept and design level. "We roll that into a design for manufacturability type of consulting, so when they are close to completion of a design, we take continuous looks at the design," said Miles. "We want to make sure they're implementing any and all strategies to ensure the highest level of repeatability and quality at the lowest cost possible. All this is based on the application. Our sales engineers are qualified engineers that have worked on the production floor, so they have the hands-on experience of knowing what flows through the shop best and how," he added. "Program Management will continue to monitor those opportunities for engineering consultation, and provide further advice when we see an opportunity to take out costs or increase the level of quality."

Company Creates Global Presence

Larsen Manufacturing has a manufacturing presence in the western and eastern hemispheres, with a wholly-owned plant on the Mexican border in El Paso, Texas, and a bilateral manufacturing agreement with a reliable manufacturer in Asia. The plant in Asia makes parts for domestic markets, which are sold and distributed in that area. The Texas facility serves not only the Juarez, Mexico market, but has also expanded well beyond the border into Chihuahua, Monterey, and Guadalajara, Mexico.

"Most of the products we produce are for the North American region," said Larsen. "What we decided to do to support our customer's growth in other parts of the world is to strategically locate ourselves in the region they compete in. What ends up happening is that many of the products we make in the U.S. are also made in Asia. It's very common in the automotive industry to have a program that's supported in North America by North American suppliers, but at the same time in Asia. They'll have Asian suppliers positioned in that region, so we've positioned ourselves to support our customer base in the regions where they utilize the parts. The plant in Asia is doing similar types of work to what we are doing in the U.S."

Larsen Manufacturing produces a variety of sizes and shapes and types of metal automotive parts and products in its metal stamping business unitPhoto courtesy of Larsen Manufacturing

When the company decided to open its plant in El Paso, David Larsen said one of the benefits they had was that the company understood the El Paso region quite well, since his father had previously operated a business in the same industry in El Paso. David's co-president, who is also his twin brother, Denis Larsen, runs the plant in El Paso. David's and Denis's grandfather and father, and also an older brother, were in this business. David said that Larsen Manufacturing "is a re-creation of what my family's businesses needed to be for the next century."

Larsen opened the El Paso plant in 2001, two years after the company had opened its headquarters plant in 1999 near Chicago. Company officials wanted the El Paso facility to be totally independent and autonomous, yet equally able to offer a high level of technical capabilities.

"We're using the plant in El Paso to serve domestic markets in Mexico," Miles explains. "Household appliances (gas tubes, burner caps, and brackets), automotive, and consumer electronics (chassis, covers, internal shielding components, and front cover plates) are all a part of our Mexico strategy. Mechanical assembly is also a value-added service added to our core competencies. We also offer level two assembly, like hardware insertion. We selected El Paso so we could be as close to the border as possible, but still in the confines of the United States. We think the talent base is of a high level in El Paso, and the turnover rate for our employee base is very low compared to our south of the border counterparts."

The company's co-president, David Larsen, is very willing to talk about the challenges that OEMs have to deal with when going overseas to get parts and components manufactured. "Offshoring is very costly, and I think that's why many of our customers are seeing and analyzing the total landed costs, and the total landed value of having a local supplier," Larsen surmises. "They have to look at the total costs of having a supplier across the ocean. I think the reason we're starting to see more North American manufacturing is because the OEMs are really starting to look at all of the hidden costs of offshoring their work. In the past, they never accounted fully for all of these additional costs, let alone the risks."

Assisting Clients with New Product Introduction

The fabrication and metal stamping company has many quality tools, carefully designed procedures, and safeguards in place to ensure high quality on a repeatable basis. For example, for new product introduction, the company uses a very effective advanced product quality planning (APQP) process. "We maintain a very low PPM level," Winter said. "We work with our customers to remove intrinsic problems from the design and then design our own process during the APQP phase. The output of our APQP process is PPAP (production part approval process). This is a compilation of documentation that includes dimensional reports, statistical analysis, measurement system analysis (MSA), and material documentation, along with whatever customer-specific requirements there might be. We have the capability, in many instances, of measuring parts directly against a CAD model. We also provide control plans and other documents, such as FMEA (failure mode and effects analysis). During the APQP process, a cross-functional team analyzes each step in the product realization process—from ordering raw material to shipment of finished goods—in order to anticipate and mitigate risk and identify opportunities for error-proofing."

Error-proofing, sometimes referred to as the Japanese term, Poka-yoke, is an integral part of Larsen's quality management strategy. "It's a type of quality assurance mechanism," explained Don Winter. "Think of a long-run, high speed stamping process. Say you have a small hole in the part, and you're concerned that a punch could break and parts could be missing the hole. To eliminate the risk, an electronic sensor is built into the tool that monitors that hole. If the punch breaks, and the hole is missing, the press stops automatically."

Before a project is released for full production, the customer approves the PPAP or first-article documentation submission. "There are requirements from the automotive industry that you must have an approved PPAP," Winter remarked. "This system is what's in place to assure customers that we understand their requirements and are capable of meeting or exceeding them in mass production. We do continual product and process audits to ensure that our systems are functioning at a high level and doing what they're designed to do. If we do run into a problem during production, we have a very strong corrective action system and adjust the process and requalify the product if necessary. We use SPC (statistical process control) in our processes and do capability analysis to ensure that process decisions are based on valid data, not just guesses as to how the processes are performing."

To assure high quality, Larsen has two coordinate measuring machines (CMM) that are programmed to check very complex parts with hundreds of dimensions. The CMMs have digital computer control (DCC) robotic capability, so that once they're programmed to verify a specific part, it can be done automatically thereafter. "We'll take a look at five active manufacturing machines and then set up our CMM," Winter comments. "We can set up multiple parts at a time, and it will automatically check these parts on a regular basis. It provides electronic and paper output to provide a record of the quality of the part. We also have a very sophisticated vision system from Amada called FabriVision. It's capable of verifying production parts directly against CAD data, and is used mainly in our sheet metal operation for verification of parts from our laser and turret machines. We put the part on the FabriVision stage, and scan it with the laser eye. Then we overlay the scan on our CAD drawing to see if it meets the drawing specs."

One unique business unit that the company operates is the Specialty Fabrication and Machining unit in its Illinois plant. This business unit provides heavy-duty, industrial fabrications, usually large finished products that might be too complex for the main plant.

"We primarily concentrate on complex weldments, with complete assemblies," said Dave Ladley, the business unit development manager for Specialty manufacturing. "We provide anything from prototypes to complete assembly services, and machining capabilities from prototypes to full production runs. We use the machining to supply our assemblies, but also to supply other customers with machined parts. One of the jobs that we've worked on, for example, is a wake board and ski tower for a boat. We machined the bases and used our 3-axis tube bender to bend the tower. We assembled it, had it painted, and then shipped it."

The specialty fabrication unit utilizes heavier gage metals that are not normally used in its primary business, said David Larsen. "These are custom welded components, with custom grinding and finishing, Larsen said. This is more of an industrial type of fabrication. You would see some of this in the wind turbine industry, the oil and gas industries, and the heavy transportation industry. We started doing this type of work a couple of years ago, and it's turned out to be a flourishing business unit for us."